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The Fashion Transparency Index 2021

250 of the world’s largest fashion brands and retailers were reviewed and ranked according to what information they disclose about their social and environmental policies, practices and impacts, in their operations and supply chain. We see a lack of public disclosure across all major brands relating to issues such as social auditing across the supply chain, living wages for supply chain workers, purchasing practices, unionisation, gender and racial equity.

Major brands have a responsibility for their supply chain

Major brands have a clear responsibility to look at their supply chain, identify human rights and environmental risks and impacts and address them. A lack of visibility of supply chains can allow exploitative, unsafe working conditions and environmental damage to thrive, while obscuring who has the responsibility and power to redress these issues. As a first step, brands and retailers need to understand and disclose their own supply chain – this means greater traceability and transparency is necessary.

Some good news

The good news in this year's index is that it’s becoming more common for major brands to publish a list of their first-tier manufacturers, where the final stage of production occurs, e.g. cutting, sewing, finishing products and packing them for shipment. A decade ago, having public access to these factory lists seemed like an unrealistic dream for many NGOs and trade unions, but now nearly half of the major brands in this Index publish such a list, covering at least a core selection of their manufacturing facilities.

Further positive news is that we have seen many brands disclose an increasing level of detail about their manufacturing facilities.

Slow progress beyond the first-tier of manifacturing

Disappointingly though, we are still seeing slow progress on the disclosure of production facilities beyond the first-tier of manufacturing, where millions of people around the world are working to produce and process the fibres and fabrics we wear, with just 27% of brands disclosing some of their processing facilities (3% more brands than last year) and 11% disclosing some raw material suppliers (4% more brands than last year).

Covid-19 pandemic placed immense financial burden on suppliers and workers

Major brands and retailers collectively cancelled an initial USD $40 billion in response to retail store closures and fear of lost profits. As a result, many suppliers were forced to close and unable to put workers on furlough, pay their wages, or provide severance pay. The people who make our clothes ended up bearing the heaviest burden of the pandemic, despite being the most vulnerable to its impact.

Fewer than 1 in 5 major brands (18%) disclose the percentage of order cancellations they made during the pandemic, while only 14% disclose the percentage of orders that were cancelled and not yet reinstated.

Only 3% of brands were willing to adequately answer a question related to workers receiving wage payments during the pandemic, and only 3% responded to a question about worker layoffs. What we know is that more than 3 million garment workers lost their jobs during the pandemic, and many were denied millions in back wages and severance. These trends indicate it is not enough to ensure that brands properly pay suppliers, but that there also must be mechanisms in place to ensure payment of wages, protection of jobs, and guarantees for worker safety and social protection. The best mechanisms to do that are strong, independent unions with collective bargaining rights; enforceable, binding agreements; and robust social safety nets.

Further evidence suggests that union-busting has become more prevalent over the past year, where dismissals have been made on the basis of union membership and non-union workers hired in their place.

Lack of data on trade unions and collective bargaining agreements

Despite the importance of workers' rights, just 9% of brands disclose the number or percentage of supplier facilities that have independent, democratically elected trade unions and just 10% disclose the number of workers in their supply chain that are covered by collective bargaining agreements. Though this disclosure has slightly increased compared to last year, these figures are far below what they should be, particularly considering most brands require worker representation in supplier facilities within their supplier codes of conduct. Just 8% of brands publish data on the prevalence of collective bargaining and freedom of association related violations in supplier facilities.

Ring-fencing of labour costs is seldom

Workers’ labour rights and wages should never be part of the price negotiation process between brands and their suppliers. Ring-fencing labour costs, meaning that workers’ wage rates (including overtime and benefits such as sick-pay and social insurance) are a fixed line item, helps ensure that workers’ welfare and access to decent working conditions are off the negotiation table. Despite this, fewer than 1 in 10 major brands disclose a method for ring-fencing labour costs in their price negotiations with suppliers, and just two brands (C&A and H&M) provide data on the number of orders they have placed where labour costs have been isolated and ring-fenced. Moreover, these only cover a portion of their overall orders. If major brands do not safeguard labour costs in price negotiations, they risk profiting from worker exploitation, including poverty level wages, unpaid overtime and unpaid legally mandated benefits.

No evidence for living wage

Only 27% of big brands disclose their approach to living wages for workers in the supply chain and just 2 out of 250 brands disclose data on the number of workers in the supply chain who are actually paid living wages. Few brands track and publish the number of workers in their supply chain that are unionised or covered by collective bargaining agreements and not a single brand reviewed gives evidence publicly that the collective bargaining agreements in place in their supplier facilities provide workers with wages that are higher than the legal minimum.

Some improvements - but still a long way to go

While we have seen many brands increase their level of transparency yea-ron-year, and share more information about what they’re doing on human rights and environmental issues, this isn’t nearly enough. Human rights and environmental abuses are still rife in this industry. Over half of the world’s largest brands and retailers still do not disclose their suppliers. With an average score of just 23% in this index, many big profitable brands remain largely opaque about their efforts to address human rights and environmental issues.


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